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Bitcoin Risks – Pitfalls Trading Bitcoins Instead Of Investing
To profit from the rise of Bitcoin, you should first purchase Bitcoin and then hold onto it until its value rises, and then sell it for a profit.
There are a number of exchanges and betting sites.
Even binary options trading / forex related sites will allow you to place bets and wager on whether you think the value of Bitcoin will rise or fall over any given time period.
There are some huge risks that you should be aware of. When you trade and bet on the value of Bitcoin, you run the real risk of losing your investment.
However, if you can comfortably afford to place such wagers, and think you do have the skills and abilities to predict the direction of price movement of Bitcoin, then trading Bitcoin may be something you should consider doing.
Cryptocurrency Exchanges Where to Buy Bitcoin
Bitcoin Trading
There is an alternative way to profit from the value of the rise and fall of Bitcoin without having to purchase any digital currency. That is by signing up with exchanges (CME, CBOE) offering Bitcoin futures.
Forex brokers and Bitcoin exchanges will allow you to basically place bets on your price forecast for Bitcoin. If you predict correctly, you can make huge profit in a short time. Alternatively, you may lose everything, if you have placed bet on the wrong side.
Betting on Bitcoin
As it can be understood, the risks are much higher when you bet on Bitcoin’s direction of price movement, as opposed to holding Bitcoin in your Bitcoin wallet. You need to assess those risks, if you intend to bet on Bitcoin.
You run a chance of losing the entire amount of any stakes you place on such bets and trades which is something you are unlikely to experience if you do buy Bitcoin.
Licensed Trading Sites
The only way you can negate the risk of running into problems when you do come across any site that will have Bitcoin trading opportunities on offer is to only sign up with the fully licensed and regulated ones.
Trading at an unlicensed site will may risk your capita and profits, if any.
Stick to Your Trading Limits
It is very easy to get carried away and become obsessed with generating sustained profits when you are a Bitcoin trader. So, I would always advise anyone who is thinking of doing so to put into place strict limits and always stick to them.
Conclusion
Gambling involves risks. When you to place a trade on the direction of price movement of Bitcoin, then the investment is at risk. If the value of Bitcoin doesn’t move in the direction you had predicted, you may stand losing the entire capital.
When you buy Bitcoin and then hold onto it, the chances of Bitcoins’ value dropping down to zero is of course negligible.
At the end of the day, there are people who enjoy gambling. If you are one such person, with skill and judgment required to trade on the value of Bitcoin, then I would not discourage you.
Frequently Asked Questions
Based on the situation, you should determine whether Bitcoin is something you should start using or invest in. I have answered several questions related to crypto currency below, to clear your doubts.
Can I bet on sports using Bitcoin?
How much should I pay for Bitcoin?
Why is Bitcoin so expensive?
When it a good time to buy digital currencies?
Can I get a digital currency wallet for free?
Further Reading
The main reason why many companies and exchanges are now letting their users and customer to trade Bitcoin instead of encouraging investments is that there is a lot of money, which can be earned in the form of fees. Speculation carries a considerable amount of risk and is not suitable for everyone.
Do spend some time in this site to read other articles of mine such as “Are all Bitcoin Exchanges the Same” and “Who or What Sets the Value of Bitcoin”.
